Economic theory in the context of "Heterogeneous agents"

In economics, scarcity refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good. If the conditions of scarcity did not exist and an "infinite amount of every good could be produced or human wants fully satisfied ... there would be no economic goods, i.e. goods that are relatively scarce..." Scarcity is the limited availability of a commodity, which may be in demand in the market or by the commons. Scarcity also includes an individual's lack of resources to buy commodities. The opposite of scarcity is abundance. Scarcity plays a key role in economic theory, and it is essential for a "proper definition of economics itself".

British economist Lionel Robbins is famous for his definition of economics which uses scarcity: "Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." Economic theory views absolute and relative scarcity as distinct concepts and is "quick in emphasizing that it is relative scarcity that defines economics." Current economic theory is derived in large part from the concept of relative scarcity which "states that goods are scarce because there are not enough resources to produce all the goods that people want to consume".

Zero-sum game is a mathematical representation in game theory and economic theory of a situation that involves two competing entities, where the result is an advantage for one side and an equivalent loss for the other. In other words, player one's gain is equivalent to player two's loss, with the result that the net improvement in benefit of the game is zero.

If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. Thus, cutting a cake, where taking a more significant piece reduces the amount of cake available for others as much as it increases the amount available for that taker, is a zero-sum game if all participants value each unit of cake equally. Other examples of zero-sum games in daily life include games like poker, chess, sport and bridge where one person gains and another person loses, which results in a zero-net benefit for every player. In the markets and financial instruments, futures contracts and options are zero-sum games as well.

An economic ideology is a set of views forming the basis of an ideology on how the economy should run. It differentiates itself from economic theory in being normative rather than just explanatory in its approach, whereas the aim of economic theories is to create accurate explanatory models to describe how an economy currently functions. However, the two are closely interrelated, as underlying economic ideology influences the methodology and theory employed in analysis. The diverse ideology and methodology of the 74 Nobel laureates in economics speaks to such interrelation.

A good way of discerning whether an ideology can be classified an economic ideology is to ask if it inherently takes a specific and detailed economic standpoint.

In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance has traditionally been explained by reference to deterrence theory, according to which punishing a behavior will decrease the violations both by the wrongdoer (specific deterrence) and by others (general deterrence). This view has been supported by economic theory, which has framed punishment in terms of costs and has explained compliance in terms of a cost-benefit equilibrium (Becker 1968). However, psychological research on motivation provides an alternative view: granting rewards (Deci, Koestner and Ryan, 1999) or imposing fines (Gneezy Rustichini 2000) for a certain behavior is a form of extrinsic motivation that weakens intrinsic motivation and ultimately undermines compliance.

Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources.

Physiocracy (French: physiocratie; from the Greek for "government of nature") is an economic theory developed by a group of 18th-century Age of Enlightenment French economists. They believed that the wealth of nations derived solely from the value of "land agriculture" or "land development" and that agricultural products should be highly priced. Their theories originated in France and were most popular during the second half of the 18th century. Physiocracy became one of the first well-developed theories of economics.

François Quesnay (1694–1774), the Marquis de Mirabeau (1715–1789) and Anne-Robert-Jacques Turgot (1727–1781) dominated the movement, which immediately preceded the first modern school, classical economics, which began with the publication of Adam Smith's The Wealth of Nations in 1776.

Business economics is a field in applied economics which uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets. A professional focus of the journal Business Economics has been expressed as providing "practical information for people who apply economics in their jobs."

Business economics is an integral part of traditional economics and is an extension of economic concepts to the real business situations. It is an applied science in the sense of a tool of managerial decision-making and forward planning by management. In other words, business economics is concerned with the application of economic theory to business management. Macroeconomic factors are at times applied in this analysis. Business economics is based on microeconomics in two categories: positive and negative.

Anarcho-capitalism (colloquially: ancap or an-cap) is a political philosophy and economic theory that advocates for the abolition of centralized states in favor of stateless societies where systems of private property are enforced by private agencies. Anarcho-capitalists argue that a society can function without a state through voluntary exchange and private institutions that provide law and security. This would result in a voluntary society based on concepts such as the non-aggression principle, free markets, and self-ownership. In the absence of statute, private defence agencies and/or insurance companies would operate competitively in a market and fulfill the roles of courts and the police, similar to a state apparatus.

According to its proponents, various historical theorists have espoused philosophies similar to anarcho-capitalism. While the earliest existing attestation of "anarchocapitalism" [sic] is in Karl Hess's essay "The Death of Politics" published by Playboy in March 1969, American economist Murray Rothbard was credited with coining the terms anarcho-capitalist and anarcho-capitalism in 1971. A leading figure in the 20th-century American libertarian movement, Rothbard synthesized elements from the Austrian School, classical liberalism and 19th-century American individualist anarchists and mutualists Lysander Spooner and Benjamin Tucker, while rejecting the labour theory of value. Rothbard's anarcho-capitalist society would operate under a mutually agreed-upon "legal code which would be generally accepted, and which the courts would pledge themselves to follow". This legal code would recognize contracts between individuals, private property, self-ownership and tort law in keeping with the non-aggression principle. Unlike a state, enforcement measures in Rothbard’s version of an anarcho-capitalist society would only apply to those who initiated force or fraud. Rothbard views the power of the state as unjustified, arguing that it violates individual rights, reduces prosperity, and creates social and economic problems.